Best Week In Two Months

A third straight month of job losses only dragged down the Dow slightly, explains Dylan Ratigan. The modest decline happened after the Labor Department said employers cut 80,000 jobs in March, the worst drop in 5 years. Additionally, the unemployment rate rose to 5.1 percent.

I think negative news is priced into the market, says Guy Adami. It seems to me that the next 500-800 points will be higher. Bear Stearnscould have been a temporary bottom for this market, he speculates.

Also, financials had an exceptional 5 days with Merrill , Citigroup and Lehman all up 16% for the week, adds Ratigan.

I bought some Fannie Mae calls today, says Karen Finerman. I expect to see legislation that will help Fannie and Freddie.

I don’t like the financials, counters Pete Najarian. Right now they are a “fire game.”

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BREAKING NEWS: YAHOO FALLING AFTER HOURS

The headline: After Bell Yahoo! Shares Fall

Shares of Yahoo fell 5.1% after the close on Friday after a source said Microsoft is evaluating its Yahoo offer in light of worsening market conditions, and that it believes the value may be less than when it initially made its bid.

This is a real problem for Yahoo, says Jeff Macke. They really don’t have anywhere to go. I’d buy Microsoft on this news, he adds.

It’s time for them to negotiate, adds Karen Finerman. Yahoo! doesn’t hold anymore cards and I don’t think the delay serves anyone.

The delay benefits investors like me who are selling calls and want this to continue, counters Pete Najarian. Now it looks very unlikely that the price will go higher and that’s why I recommend selling calls.

Traders are expecting deeper rate cuts after witnessing how willing Congress is to intervene in troubled areas, such as the housing industry. In fact, the futures market is now pricing in a 38% chance of 50 bps rate cut this month, explains Dylan Ratigan. The Fed holds its next meeting on April 30th.

Meanwhile, Federal Reserve Chairman Ben Bernanke and the Bush administration on Thursday defended the decision to rescue Bear Stearns amid questions by lawmakers about why the government was helping Wall Street investment houses but not people on Main Street.

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BAD ECONOMY, GOOD STOCKS

The headline: Stock Market is a Leading Indicator, Looking Six Months Out, Is Now The Time To Buy Stocks?

Strategic investor Dennis Gartman, author of The Gartman Letter, joins the panel for this conversation. Following is a synopsis of his main points.

The stock market’s behavior is impressive, says Gartman. I’ve turned bullish on stocks this week, he adds. I think the lows are in and the panic liquidation has occurred. The market doesn’t really go down on bearish news, anymore.

How do you trade it?

I think investors should own steel, the railroads and coal, Gartman replies. In other words, the things that if dropped on your foot, it hurts. Also you can be long the S&Pand be fine.

What about gold?

I see the trend going from the lower left to the upper right, says Gartman. Gold has made a good showing this week.

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APPLE BREAKOUT

The headline: Apple Shares Break Out This Week After Putting In Nice Bottom.

On Thursday Apple said a new consumer study showed its iTunes online music store vaulted past Wal-Mart in February to become the top overall music retailer in the U.S. explains Dylan Ratigan. That comes amid speculation that low iPhone inventory in stores could mean a new 3G version will be released soon.

I think there’s still upside in Apple, says Pete Najarian.

I’d buy Research In Motion instead, adds Jeff Macke, because there’s a false perception that they’re in competition with Apple.

GROWING GAINS

The headline: Ag Trade As Powerful As Ever After Monsanto, Mosaic Earnings This Week.

Shares of Mosaic soared this week after profits rose more than tenfound and trounced estimates, explains Dylan Ratigan.

I think there’s more upside, says Pete Najarian. Look at the commodity potash for pricing power, he counsels, as well as the railroads which will move the commodities.

I like Burlington Northern , as well as US Steel and Apache in this space, adds Guy Adami.

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